6700 dollars is placed in an account with an annual interest rate of 8%. How much will be in the account after 24 years, to the nearest cent?

Question

6700 dollars is placed in an account with an annual interest rate of 8%. How much will be in the account after 24 years, to the nearest cent?

Answer 1

The answer depends on whether the interest is simple or compound.

For simple interest:

A = 670(1 + 0.08)(24)

For compound interest

A = 670(1 + 0.08)²⁴

Answer 2

Turn 8% into a decimal which is 0.08

Multiply the 0.08 by the 6700 you have in the account to get $536. This means every year $536 will be added to the account. You need to multiply this by 24 to see how much money will be added after 24 years.

24 x 536 = $12,864, add this to your original 6700 dollars.

6700 + 12,864 = $19,564